_Belden and Digital Transformation case.pdf

t rP os 9 - 8 2 3 -0 0 2 REV: JAN UARY 17, 2023 FRANK V. CESPEDES AMY KLOPFENSTEIN Belden and Digital Transformation: From Product Sales to Solutions Sales op yo In November 2022, Dr. Ashish Chand, executive vice president of industrial automation solutions at Belden, a global manufacturer of networ...

t rP os 9 - 8 2 3 -0 0 2 REV: JAN UARY 17, 2023 FRANK V. CESPEDES AMY KLOPFENSTEIN Belden and Digital Transformation: From Product Sales to Solutions Sales op yo In November 2022, Dr. Ashish Chand, executive vice president of industrial automation solutions at Belden, a global manufacturer of network and connectivity devices, considered the next phase of a new sales initiative. Belden had historically prioritized selling devices such as switches, cables, connectors, and adapters. The new sales process—dubbed Enhanced Solutions Delivery (ESD)— required the sales team to identify ways that Belden’s technologies could optimize their clients’ production facilities. In 2021, Chand and his team piloted ESD within Belden’s consumer packaged goods (CPG) sub-vertical, and they were now expanding it to other verticals and sub-verticals. The division’s revenues and EBITDA had exceeded projections. The unit was ahead of schedule for its five-year plan, which entailed providing edge-to-cloud servicesa such as data management for advanced analytics applications. But Belden likely needed to expand and reorient its sales team to continue ESD’s momentum and invest in additional software research and development (R&D) for edge-to-cloud capabilities. Chand considered strategy, budgeting, and specific account and channel decisions as he planned next steps. tC The Operational Technology Industry No Traditionally, factories, chemical processing plants, power stations, and other industrial entities used operational technology (OT) to manage their industrial assets.1 OT devices—such as cables, wires, plugs, and switches—made up industrial sites’ network infrastructures. These devices connected heavy machinery to control systems, which directed the machines to perform tasks. OT devices made up the “nervous system” that gathered and transmitted information, whereas the control system was the “brain” that issued commands, and the machines were the “hands” that executed system instructions. Information technology (IT) primarily managed companies’ network architecture, which included its data storage, processing, and security.2 OT consisted of several markets. Global wire and cable, estimated at $181 billion in 2021, was projected to reach almost $295 billion in 2029.3 In 2021, market leaders included Prysmian (roughly $13 billion in revenue)4 and Amphenol (almost $11 billion).5 Meanwhile, the global market for industrial Do a Edge services were software programs that analyzed data near the location where it was generated. Senior Lecturer Frank V. Cespedes and Case Researcher Amy Klopfenstein (Case Research & Writing Group) prepared this case. Some data has been disguised. The authors would like to acknowledge Belden Senior Director of Solution Sales Germán Fernández, who was an invaluable partner in compiling the information to create the case. It was reviewed and approved before publication by a company designate. Funding for the development of this case was provided by Harvard Business School and not by the company. Certain details have been disguised. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2022, 2023 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Belden and Digital Transformation: From Product Sales to Solutions Sales rP os t 823-002 networking devices—which included routers, switches, connectors, and converters—was $97 billion in 2020 and was projected to reach $131 billion by 2026.6 Market leaders included Cisco, Hewlett-Packard (HP), and Siemens.7 Belden sold control and data cables, connectivity systems, I/O Modules, industrial networking devices, and cybersecurity software. op yo One trend, however, was increased commoditization of and lower margins for OT hardware, and customers increasingly requested products customized to their industry context, forcing some industrial hardware providers to narrow their scope to a smaller customer base. 8 Another trend was IT/OT convergence. While the two functions historically operated independently, industry observers anticipated they would merge into a single, integrated system.9 The shift—dubbed “Industry 4.0”— would involve digitally linked machines that shared data, communicated with each other via enterprise software, and used artificial intelligence (AI) to optimize factory performance.10 Industry 4.0 entailed technologies such as robotics, Internet of Things (IoT)-related products (such as sensors), machine learning,11 and edge computing.12 Analysts anticipated the global market for Industry 4.0-related technologies and services would grow from $102 billion in 2020 to $337 billion by 2028.13 In 2021, companies emphasizing Industry 4.0 services included equipment manufacturers such as ABB and Siemens, and technology suppliers such as Cisco and IBM.14 There were five components to customer adoption of Industry 4.0: digitizing assets onto a secure network, remotely monitoring the assets, using the data from the assets to diagnose performance issues, digitally controlling processes, and implementing processes-powered by AI.15 Factories needed to transfer data from machines to a centralized repository, and then use the data for predictive analytics and other purposes. Data transfer took place in three stages known as pre-ingestion, the point of ingestion—when data shifted into the repository—and post-ingestion (see Exhibit 1).16 tC For many companies, Industry 4.0 could lower inventory costs by up to 20%, increase labor productivity by up to 30%, and reduce machines’ downtime by as much as 50%.17 Yet many manufacturers faced implementation barriers including a shortage of technical workers, data security concerns, and uneven rollout across departments. 18 Belden Incorporated: Industrial Automation (IA) Division No In 1902, Joseph C. Belden established Belden in Chicago, Illinois. Early products included cables, electrical wire, insulation, plugs, and later networking devices for industries including energy, healthcare, hospitality, and manufacturing. By 2019, Belden had 10,000 employees, operated worldwide with staff, channel partners, and manufacturing facilities in 13 countries, and had $2.1 billion in revenue. Clients included BMW, Disney, ExxonMobil, General Motors, Goldman Sachs, and Hilton. Do Since 2007, Belden had acquired 16 companies.19 By 2019, it had a portfolio of 15 brands (see Exhibit 2) and three divisions (broadband and 5G, industrial automation (IA), and smart buildings) across three regions: the Americas (AMS), Asia-Pacific (APAC), and Europe and the Middle East (EMEA). Each region primarily sourced from local manufacturing facilities and had a dedicated sales team for each Belden division. For example, there were IA, broadband, and 5G sales teams in EMEA. Chand became executive vice president of IA in 2019 and reported to Belden’s CEO, Roel Vestjens. At the time, IA generated almost half of Belden’s revenues and 54% of its EBITDA. The division served four vertical markets (discrete automation, energy, process automation, and transportation). It 2 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 823-002 rP os t Belden and Digital Transformation: From Product Sales to Solutions Sales operated nine business units, organized by product category, each with its own profit and loss (P&L) statement. Each unit’s product management team decided its own pricing, margins, and strategy. IA employed a staff of 3,735, of whom 281 were salespeople. Account managers focused on specific products and sold directly to customers; they had strong technical product knowledge. Channel account managers (CAMs) were responsible for relationships with channel partners: distributors, installers, and systems integrators. Many sales teams had joined Belden via acquisitions and continued selling under the legacy brand. For example, after Belden acquired networking manufacturer Hirschmann in 2007, that sales team continued to sell Hirschmann-branded products. op yo Belden’s channel partners were third-party companies who managed important sales logistics, such as order fulfillment and, at times, generated demand for Belden’s products. Many channel partners came to Belden through acquisitions such as Hirschmann, and the partners’ distribution rights for a brand stayed in place after the acquisition. Thus, some channel partners only had the rights to distribute specific Belden brands and products, while others had distribution rights for multiple brands. After a customer placed an order, a distributor shipped the product from a regional warehouse. The customer then hired an installer for set up and a systems integrator to connect the new part to their factory network. Then, the distributor provided post-sale support to ensure that the new product was working properly. Distributors also promoted Belden products, and at times funneled sales requests to Belden’s sales team. For example, a local hardware partner that primarily carried Belden products could ensure a stream of sales in that region without the active involvement of a salesperson. Belden’s channel managers ensured that distributors had inventory and products aligned with customer demand. Distribution partners typically interacted directly with customers and conveyed customer feedback to the channel managers. Channel managers and distribution partners operated within a specific region and served multiple industry verticals. tC Traditional IA Sales and Buyers Belden vertical sales managers generated leads by prospecting a list of target accounts, through social media, industry events, the company website, and an internal database. Channel partners also identified leads and connected them to the sales team. No The sales process traditionally consisted of five stages: first, qualifying and validating that the lead was worth pursuing; second, discovering customers’ needs and establishing a relationship; third, defining how the customer could benefit from Belden’s products; fourth, closing the deal; and fifth, implementing the product via channel partners. A salesperson’s key performance indicators (KPIs) revolved around a five-stage funnel, including wins, bookings, open projects, and total billings. Do When organized by product, sales teams primarily sold to project managers, maintenance directors, purchasing managers, or operations managers. These buyers usually had lists of equipment that they needed and made decisions based on their immediate technical needs and target prices. The lead qualification process typically consisted of confirming customers’ product needs and budgets. In contrast, IT vendors to those companies tended to sell to decision-makers such as chief information officers (CIOs), chief technology officers (CTOs), or CEOs. These stakeholders had a broader view of their companies relative to OT customers and made decisions based on longer-term goals. For example, Belden’s product sales team might sell a plant’s maintenance director a new set of cables to update a slow conveyor belt, while IT vendors sold the company’s CTO a cybersecurity system for its office staff. Historically, IA used a cost-plus model for product sales and paid its sales team based on revenuebased quotas—profitability did not factor into the quota system. If a given salesperson met 100% of 3 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Belden and Digital Transformation: From Product Sales to Solutions Sales rP os t 823-002 their target quota, they received their full bonus, which they received quarterly. If they met less than 80% of their target, they received no commission. Typically, the bonus was 25% of a salesperson’s base salary. They received credit towards their quota after a product shipped to the buyer. The company also evaluated a salesperson’s performance relative to factors such as funnel management, forecast accuracy, and self-development, as well as their alignment with Belden’s values (see Exhibit 3). Digital Transformation and Sales op yo IT companies historically focused on the post-ingestion phase, providing services for cloud storage, data visualization, and analytics, while OT companies such as Belden sold devices for the pre-ingestion stage (refer to Exhibit 1). While IT vendors and Belden separately sold to the same companies, Chand noticed that IT network companies were increasingly soliciting customers about Industry 4.0-related solutions. He feared they would develop infrastructure and solutions to compete with Belden and try to own the data pipeline. Chand reflected, “IT vendors were speaking to our clients’ CIOs and CTOs about the possibilities of data, while we were getting relegated to a widget supplier.” Chand was also concerned that acquisitions, rather than organic growth, were fueling Belden’s gains. He believed Belden faced a “melting iceberg”b situation, in which industry-wide changes threatened its core market. Thus, in 2019, he initiated a digital transformation aimed at ultimately providing a full suite of edge-to-cloud solutions that would allow Belden to compete against IT vendors (see Exhibit 4), and he changed the division’s name from Industrial Automation to Industrial Automation Solutions (IAS). tC The first stage was ESD, a strategy to enable IAS to go from selling products to selling solutions. While Belden once focused on selling devices that served specific networking purposes within a factory or plant, the team now sold customized solutions to clients’ operational challenges.20 Senior Director of Solution Sales Germán Fernández explained, “When we used to meet with clients, we compared our products to competitors’ but did not ask how they planned to use them. Now we ask about customers’ challenges at their production facilities and their intended use for products, suggest potential new use cases, and discuss how they can use our full product portfolio to improve their KPIs.” No Chand’s team identified seven of IAS’s existing sub-verticals most likely to benefit from Belden’s solutions. For each, they calculated the total addressable market (TAM) for Belden’s products and solutions and the portion they believed they could capture, or the serviceable addressable market. (See Table A.) Table A Belden IAS Key Markets (in $ millions) Sub-Vertical Discrete Automation Discrete Manufacturing Discrete Manufacturing Process Automation Energy Transportation Auto Manufacturing Consumer Packaged Goods: CPG Materials Handling Chemicals Power Transmission & Distribution Mass Transit Do Vertical Total Addressable Market 1,968 1,484 2,478 2,411 1,646 2,783 Serviceable Addressable Market 489 369 436 394 323 504 b The “melting iceberg” dilemma originated in the book Our Iceberg is Melting, a parable of a penguin colony that had to take action after discovering that their home for generations was in danger. Source: John Kotter and Holger Rathgeber, Our Iceberg is Melting: Changing and Succeeding Under Any Condition (New York: St. Martin’s Press, 2006). 4 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 823-002 Vertical Sub-Vertical Transportation Intelligent Transportation Systems Source: Company documents. rP os t Belden and Digital Transformation: From Product Sales to Solutions Sales Total Addressable Market 819 Serviceable Addressable Market 124 The ESD Sales Process op yo Chand launched ESD in the CPG vertical in early 2020, collapsing IAS’s nine P&Ls into two business units’ divisions (industrial wire and cable, which managed data acquisition and transmission, and industrial network solutions, which oversaw data orchestration and management). He reassigned the direct sales team from regional, product-specific units to market-specific segments (channel managers’ responsibilities stayed the same). He shifted pricing and other decisions from product management to sales, transitioned vertical account managers to become solutions account managers (SAMs), and created two new sales roles: solution consultants and digital automation consultants (see Exhibit 5). ESD expanded the sales process to eight stages (see Exhibit 6). The SAMs used a scorecard to track their progress on a project by the following components: Metrics, Economic buyer influencers (EBIs), Decision criteria, Decision process, Identified pain points, Coaching, and Competition (MEDDICC). First, the SAM qualified the lead by researching—and reporting on—each MEDDICC factor. For instance, the SAM might read press releases, Internet search results, and company websites to understand the opportunity and competitive landscape. The SAM had to assess each MEDDICC element before the project could progress. tC Second, the SAM formed relationships with the stakeholders involved in the purchase decision, to identify their challenges and pain points (see Exhibit 7). Third, the SAM framed the value of a potential investment with a specific use case. This value was the expected monetary impact of improving productivity, service availability, or product quality. Sales directors met bi-weekly to validate ESD opportunities that had completed the first two stages of the MEDDIC scorecard. No For clients expressed interest in a proposed solution, a Belden digital automation consultant visited and assessed the client’s workflow. After identifying a plant’s challenges and areas for improvement, the solutions consultant (distinct from the SAM) conducted a week-long audit of the client’s network infrastructure and created a plan to optimize that network. In tandem, the SAM met with the Belden product management team to discuss the product needs inherent in that client solution. Next, the SAM quoted the client a price for the solution and finalized the terms of the deal. Clients who purchased Belden’s plan could hire either a Belden service engineer or a third-party integrator or installer to implement the solution. Do For example, a SAM might report that a sales lead was struggling to meet their production targets. The digital automation consultant would evaluate factory operations and identify any machine glitches that delayed its production schedule. These findings were then communicated to the solutions consultant, who crafted a plan to reduce breakdowns and improve machines’ efficiency. The SAM typically owned the entire process, working with others at specific stages. For instance, the solutions consultant was responsible for defining a solution and presenting a network assessment to the SAM, who then assigned another person to the next stage of the process. Belden had not yet developed an official handover process; thus, transitions between tasks were informal and varied by SAM. The entire ESD sales cycle—from lead qualification through implementation—took a minimum of six months, while a product sale could occur in a week. The team found that the most successful SAMs invested more time during the early stages of the process, while those who rapidly moved through the 5 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Belden and Digital Transformation: From Product Sales to Solutions Sales rP os t 823-002 early stages often struggled to finalize deals. Fernández elaborated, “SAMs who start too quickly often realize there are EBIs who they have not spoken with or considered. They have to start over, get buyin from these stakeholders, and align with their priorities. The best SAMs invest time in relationships early in the process, which expedites the second half of the sales process.” Pricing op yo Belden used a tool called Value Calculator, which used a client’s input metrics to quantify the anticipated benefit of a given solution. The SAM presented the results to client’s EBIs—who were often CIOs, CEOs, CTOs, and other members of the C-suite. The specific formulas varied by region, vertical, and use case. For example, a beverage manufacturer might input its machine breakdown rates, changeover times, the time spent cleaning, and percentage of waste. The Value Calculator would determine the plant’s operating efficiency if it implemented Belden’s proposed solution and the resulting cost savings and/or increased revenue (see Exhibit 8). The Belden team introduced a new pricing model for ESD clients, charging a one-time amount based on the Value Calculator’s projected benefit of the solution. The average solution price ranged from $200,000 to $250,000, compared to $150,000 for a product sale for a similar use case. Senior Vice President of Sales and Marketing Anshu Mehrotra explained, “When we understand a solution’s value and can communicate it to customers, we have created the right to ask for prices linked to value created.” ESD clients made a purchase decision based on whether they believed Belden’s quoted price aligned with the solution’s projected value, not simply product costs. They typically focused on longterm goals and paid for ESD solutions as capital expenditures, not from their operating budget. tC Belden also charged clients an upfront fee when solutions consultants conducted the network audit, typically $10,000 for a small network in a single location and from $80,000 to $120,000 for big networks at companies with multiple sites. If the client purchased the full Belden solution, then Belden rolled the audit fee into the total cost of the solution that the SAM generated via the Value Calculator. If the client did not purchase the solution, they simply paid the audit fee. Training and Staffing Needs No During ESD’s first stage, Belden hired 7 digital automation consultants and 51 solutions consultants. The digital automation consultants were all new hires, while 12 of the solutions consultants were service engineers who transitioned internally to the new role. Digital automation consultants typically had a background in operations in a specific industry vertical—for instance, many were former plant managers. Solutions consultants tended to be technical experts with knowledge of the Industry 4.0 landscape. In 2022, the average fully-burdened cost of a digital automation consultant was $230,000 and the cost of a solutions consultant was $190,000, compared to $220,000 for SAMs. Do Meanwhile, Belden had to upskill its existing sales team to sell solutions rather than products. SAMs needed more comprehensive understanding of target ESD verticals, relevant roles within each vertical, and needed to interact with more groups both within Belden and at channel partners relative to a product salesperson. Fernández elaborated, “We do not go to customers with a pre-defined solution. So we need people who can ask the right questions of the right people.” Belden created a six-week training program that introduced salespeople to the CPG vertical (see Exhibit 9). The training included an overview of how a CPG facility operated, common challenges, and a guide to Belden’s digital solutions for CPG clients. The training consisted of online classes, roleplaying exercises, and coaching sessions focused on how to communicate ESD outcomes to clients. 6 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 823-002 rP os t Belden and Digital Transformation: From Product Sales to Solutions Sales By early 2022, there were vertical-specific training programs for Belden’s other priority markets, and SAMs were assigned to each vertical. For the automotive vertical, for example, Belden would likely assign a salesperson who lived in Detroit and had previously sold to GM and Ford. Belden also adjusted its hiring process for SAMs. A third-party agency reviewed applications and conducted preliminary interviews. Approved candidates then interviewed with Belden’s human resources (HR) team, an internal process specialist, and took an online assessment of their verbal reasoning and mental agility. Successful candidates had another interview with HR and with a line manager or a Belden sales team leader. Those who progressed had a final interview with a vice president of sales. Compensation op yo While industry-specific knowledge was a key part of ESD sales, the leadership team also prioritized hiring SAMs who aligned with Belden’s values. Fernández reflected, “Given the complexity of solutions selling, we need salespersons who can operate without clear milestones while developing cross-boundary internal relationships at Belden and with multiple buyers and influencers at clients.” Under ESD, Belden changed its sales incentive plan. Moving forward, 70% of a SAM’s bonus was based on revenues—including product sales and ESD sales. The remaining 30% was based on ESD bookings; that is, when Belden received a client’s order for an ESD solution and the client agreed upon the solution price. Senior Vice President of Human Resources Leah Tate remarked, “ESD has a longer sales cycle than product sales; the invoice might not go to the customer for six months. But our salespeople do not want to wait that long to get paid.” tC Accordingly, a SAM received credit towards their ESD quota as soon as they booked a solution; the credit was based on projected deal revenue. The quoted price for products was fixed, while Belden charged an hourly rate for services. If the number of service hours varied from the initial quote, Belden adjusted the payment—and the SAM’s compensation—accordingly. After they received payment for the solution, the earnings applied to their revenue-based quota. Tate elaborated, “Since we were asking them to change their behavior, we needed to adjust their compensation accordingly.” No Nevertheless, the Belden leadership team noticed that many SAMs focused on hitting their product sales quota before shifting to ESD goals, since product sales made up a larger proportion of their compensation plans. They hoped to ultimately change the bonus systems to 50% for product sales and 50% for ESD bookings, but had not yet decided when to make the transition. Belden also adjusted the sales team’s KPIs. SAMs had the same KPIs for product sales, but new KPIs focused on the number of ESD opportunities per SAM and the volume of completed deals. Additional sales metrics included total revenue from deals, the amount of ESD bookings, and the number of opportunities that progressed beyond the third funnel stage. IAS also adjusted performance evaluation criteria to include ESD-related goals (see Exhibit 10). Do ESD Use Cases and Customer Innovation Centers (CICs) In 2021, Belden launched its first Customer Innovation Center (CIC) in Stuttgart, Germany and a second in Santa Clara, California. These were customer-facing hubs that built, tested, and iterated solutions. Three more were planned for Chicago, Illinois; Shanghai, China; and Bangalore, India. At CICs, Belden developed prototypes of customer solutions before they finalized a deal. For example, a warehouse manager could visit a CIC—either in person or online— watch a demonstration 7 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Belden and Digital Transformation: From Product Sales to Solutions Sales rP os t 823-002 of a proposed solution for a network connecting its robotics systems, and test potential devices, scenarios, and solution designs. Vice President of Technical Solutions Vinod Rana led the CIC initiative. He said, “We don’t want to tell customers, ‘Take our products and do what you want with them.’ We want to understand what is pushing our customers to automate, and then apply our solutions to help them meet their KPIs.” CICs also developed ESD use cases based on common customer problems within each vertical (see Exhibit 11). Each use case included a Belden solution for a given issue, validated through simulations and testing in the CICs, customer feedback, market research, and internal expertise. CICs also built an accompanying Value Calculator, and then customized the standard solution to each customer’s needs. Thus, CICs were effectively factories of solutions. op yo Belden used the use cases and solutions to introduce sales teams to typical customer challenges within a vertical. Vice President of Finance Angeli Kritsas reflected, “Customers are much more likely to partner with us if our team can clearly communicate how our solution will solve their problem at the beginning of the sales conversation.” Conversely, as Vice President and Managing Director of Industrial Network Solutions Brian Lieser explained, “The use cases that help customers achieve their goals also inform the technologies and products that we develop.” By mid-2022, the CICs were developing virtual reality (VR) simulations of solutions, enabling customers who visited CICs to view a virtual rendition of their factories, warehouses, or transportation systems via a VR headset. The simulation could highlight aspects of the network infrastructure not visible to the eye. For example, a customer could watch how their network would react to changed settings on their conveyor belt, peel away the image of the conveyor belt, show how the network cable connected to other devices, and how data flowed through machines in the factory. tC ESD Challenges: Staffing, Channel Partners, Geographic Differences No While Belden had historically hired from OT competitors, ESD required talent specialized in data visualization, software, and business analytics. As Tate noted, “A lot of times we would call someone and they would say, ‘Oh, the cable company.’ We had to persuade people to hear the story of our transformation and buy into ESD.” Additionally, relatively few individuals had the combination of technical skills and industry expertise needed for the consulting positions, and hiring for the roles was competitive. Still, Chand was optimistic that ESD would help long-term retention. By mid-2022, less than 7% of the IAS team had turned over since ESD’s launch. He explained, “Good people leave if you do not have a strategy. Once people understood why we were pursuing ESD, they wanted to stay.” Do Belden also had to navigate its relationships with distributors, installers, and integrators. “Some partners are good at selling certain products, but do not promote our entire portfolio,” said Andries Boone, VP of Solutions Delivery for the Americas. “Our business is transforming, and we need partners who can help us sell solutions.” Some channel partners recognized that selling customized solutions would help protect their business against distributors, such as Amazon, that could transport larger quantities of product at a lower cost. Other partners in certain regions—such as the U.S.—traditionally managed most communication with customers, while ESD required Belden’s team to develop a closer relationship with end users. Thus, some partners worried that Belden would sell products directly to customers. Mehrotra remarked, “We do not want to be seen as competing against the people we sell through, because Belden does not have the resources, infrastructure, or desire to replace its channel partners. But some partners are not yet ready to deliver the services that solutions customers need.” 8 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 823-002 rP os t Belden and Digital Transformation: From Product Sales to Solutions Sales In other instances, customers expected Belden, rather than an installer or integrator, to implement the solution. Belden then had to persuade their channel partners to develop the capacity to provide a wider array of implementation services, or allow Belden to perform the work. Meanwhile, SAMs conducted joint visits with distributors to identify potential opportunities. Each region had different levels of readiness and complexity for solutions sales. In Europe, Belden had different customers and distributors in each country, and salespeople often had to manage several verticals within a country, or speak multiple languages and cover several countries. A U.S. salesperson could cover a single vertical, sell to the entire region, and only speak English. op yo Meanwhile, the pivot from regional to vertically focused sales complicated the U.S. market. Previously, Belden only considered whether, for example, to hire a salesperson in California vs. Ohio. With ESD, Belden had to consider the location and industry expertise of its staff, as well as the TAM and sales resources within a given geography. For example, Belden might have two SAMs in California, one with experience in mass transit and the other with a background in energy. Belden might need to consider whether to hire a third SAM in California with a background in discrete manufacturing, or a SAM with discrete manufacturing expertise in a location where the company currently had no coverage. In such scenarios, the Belden team typically prioritized placing new SAMs in regions where they could leverage synergies between other SAMs and CAMs and use CIC capabilities, as they were likely to generate more revenue relative to a SAM in a region without those resources. Continuing the Transformation tC In July 2022, Belden collapsed the two IAS business units into a single P&L, with regional solutions delivery and central support including products and R&D. By late 2022, IAS had served 69 customers with its ESD approach, generating almost $7.7 million in revenue and about $16.3 million in bookings. Belden had trained SAMs to serve materials handling, mass transit, and auto manufacturing customers, and planned to expand ESD to the remaining priority verticals by Q3 2022. Chand anticipated that, by 2026, ESD would generate half of IAS’s total revenues, which by 2022 had already increased to $1.4 billion from $1 billion in 2019, while EBITDA had exceeded budget projections by $84 million, despite declining about 10% in 2020 due to the COVID-19 pandemic. No Thus far, IAS had self-funded ESD, primarily due to a surge in its Small Projects, Maintenance, Replacements, and Overhaul (SPMRO) business during the pandemic. But Lieser’s team was developing edge computing software, which distributed an automation system’s “brain” from a centralized controller to multiple devices throughout the network, and products that transported data from sensors to the cloud. Hence, significant additional investment in R&D was looming. As Senior Vice President of Strategy Hiran Bhadra remarked, “We need to stay relevant to how customers expect their networks to operate in the future. With significant increases in the number of devices connected to the network, and as digital transformation becomes pervasive, customers might come to us with very different challenges than they face today.” Do Chand believed IAS was uniquely positioned within the Industry 4.0 landscape with a full suite of connectivity devices. While competitors sold devices for data acquisition, transmission, or orchestration, none served the full pre-ingestion stage. He explained, “Companies such as Amazon, Microsoft, and others have the software, staff, and computing power to provide cloud storage and analytics services, but not OT devices that transfer data from sensors and other access points to the cloud. And among other OT providers, only Belden sells products that provide the full network backbone.” He believed IAS therefore had a window of opportunity: “Cloud companies’ goal is to drive more data to the cloud, and the industrial sector generates more data than most other sectors. It 9 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Belden and Digital Transformation: From Product Sales to Solutions Sales rP os t 823-002 is inevitable that cloud companies will enter our space, and we need to be ready,” he said. For instance, in May 2022, Google Cloud announced the launch of a manufacturing solutions unit that promised to standardize industrial clients’ data across their different devices.21 Channel, Customer, and Investment Decisions NTE, a well-established French distribution partner, had identified an opportunity with a French materials handling company that specialized in self-driving cars. That company lacked the capacity to expand its services, and had contacted NTE for advice. NTE, in turn, had contacted a Belden CAM, who sent the lead to a SAM. op yo After preliminary conversations with the potential client, the SAM wanted to assess the network capabilities in its warehouses. NTE did not provide such services, yet still expected to be involved in the sales process, as they had discovered the opportunity. Meanwhile, the self-driving car company anticipated dealing directly with Belden. The company also expected to receive Belden products within five days of placing an order once the project began, including requests for spare parts and extensions. Fernández raised the issue with Ernesto Bernal, the regional channel sales director. Both were aware that the scenario created a potential internal conflict between Bernal’s channel team—which managed demand capture and fulfillment—and the solutions sales team, which was responsible for demand creation and managed some direct accounts. The two leaders debated their options. tC One option was for Belden to provide the necessary services through NTE, which entailed Belden providing the technical labor and NTE handling the administrative side of the deal. Under this scenario, NTE would claim 20% of the price of the services, estimated to be $28,000, and ship Belden products at their standard margin to the client for the solution. This approach would preserve the relationship with NTE, but significantly erode Belden’s margin, particularly since Belden could handle the administrative work itself. Fernández was also concerned that the client would become confused about Belden’s role if there were too many parties involved. No A second option was conducting the business through a German channel partner who could provide the network assessment, Belden products, and other required services. The German partner would be paid, while NTE might make no money. Bringing in the German partner would alleviate Belden’s workload, but would NTE be unwilling to identify leads in the future? Fernández and Bernal also worried that language barriers could arise between the German partner and the French client. Finally, Belden could deliver the services directly through a CIC, handle all technical and administrative labor, and not involve channel partners. Belden could claim all revenue from the services as part of the ESD sale. Fernández knew that if Belden delivered services itself, it would still need to rely on a European distribution partner to ship products, given the client’s expectations for a five-day delivery window. He also knew that this option would upset his colleagues who managed Belden’s relationship with channel partners. Do The SAM, NTE, and the client expected a response soon. City Transport Authority, a mass transit operator that managed a network of eight metro lines and more than 160 stations in the U.S. Mid-West, was willing to purchase a Belden solution for its Passenger Information Systems. Typically, City Transport Authority sourced its products from Magenta, a distributor in the Mid-West transportation market. However, Belden’s solution required products from different Belden brands, including products that Magenta did not have the rights to distribute. Thus, City Transport Authority would need to buy products from different Belden distributors. The SAM 10 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 823-002 rP os t Belden and Digital Transformation: From Product Sales to Solutions Sales managing the sale worried that sending City Transport Authority to multiple distributors would hurt future ESD initiatives in the large transportation market. The SAM discussed the situation with Boone. Belden could make an exception and allow Magenta to supply all the Belden products needed for the solution; however, other distributors would likely expect Belden to make similar exceptions for them. The exception could also upset other Mid-West distribution partners who invested in stocking Belden products but would not be able to sell them in the City Transport Authority deal. Alternately, Belden could instruct Magenta to buy the necessary brands from other Belden distributors and resell them to City Transport Authority. This might appease Belden’s other Mid-West partners, but it would erode Magenta’s margin and perhaps encourage Magenta to do business with Belden’s competitors during future mass transit solution sales. op yo Boone also considered creating a new partner category that would eliminate brand restrictions when partners purchased products to implement solutions. Belden currently had four partner categories: Elite, Premier, Pro, and Authorized. Each had different advantages (including Beldensponsored professional development trainings, discounts, rebates, and marketing services), while requiring a minimum inventory level (which increased with each partner tier), training staff on different product lines, and providing Belden with market information. The new ESD category would give partners access to different product lines without the liability of maintaining permanent stock. tC However, Boone wondered how partners would view the new category. He also considered the impact on Belden’s supply chain and order-fulfillment costs. Creating a new partner category would require Belden to create new contracts and legal terms and conditions, enablement material, and marketing collateral. Internally, the company would need to develop a validation process whereby a SAM verified that orders were part of an ESD opportunity. Collectively, Boone estimated that rolling out the new category would require a minimum of six months and cost $300,000. Investment Options Chand also had to finalize his investment plans for 2023, including how to allocate an additional $26 million to accelerate ESD. Do No Belden’s Global Product Organization (GPO) leaders were very vocal about their R&D needs for evolving IA technologies, arguing that if they did not produce new products, customers would turn to rivals who sold more technologically advanced options. They also argued for additional investments in identifying and developing new, emerging solutions architectures for customers in different vertical segments. Meanwhile, sales leaders argued that they needed more salespeople due to ESD’s longer sales cycle and that hiring should take priority over R&D needs, as GPO’s new devices would fail if there were no customers to buy them. They also pointed out that penetrating new accounts took time and that many use cases and solutions developed at a CIC were the result of sales conversations with clients, not product-driven R&D efforts, and so adding more digital automation and solutions consultants was also important. Thus, Sales needed to build their team and engage with new clients immediately to secure an established customer base for solutions development and new products. Chand asked his finance team to project the result of investing in sales vs. R&D. They found that the average Belden salesperson had a fully loaded annual cost of $250,000, including travel expenses, and a sales quota of $5 million. This quota generated $3 million in revenue after about two years, assuming a 60% close rate and a 20% EBITDA margin. It often took a new hire one year to ramp up their sales. Meanwhile, it generally required two and a half years to break even after initiating an R&D 11 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Belden and Digital Transformation: From Product Sales to Solutions Sales rP os t 823-002 project. The finance team provided the following five-year pro forma for a $250,000 investment in a Sales hire versus an R&D project (see Table B). Table B EBITDA Contribution of a $250,000 Investment in Sales vs. R&D (in $ thousands) Year 1 Year 2 Year 3 Year 4 Year 5 Total 5 Years 300 0 600 50 600 450 600 650 600 1,000 2,700 2,150 Sales R&D Company documents. op yo Source: Fernández noted that the projections from the sales investment did not include turnover costs, while the R&D figures did not factor in sales generated through channel partners, which comprised 70% of Belden’s revenue. He added: In the initial years, it is likely that more salespeople will generate more ROI than good R&D. In the current uncertain global economic environment, sales investments are attractive and perhaps necessary. Over 10 years, R&D will typically generate more EBITDA due to the ongoing revenue contribution, intrinsic to new product introduction, and the multiplier effect from channel partners’ market access. Any salesperson also faces the law of diminishing returns: not all reps will generate a $5 million pipeline, and it gets harder to sell as you saturate a given account, territory, or vertical segment. Do No tC Chand contemplated the potential investment, weighing the benefits and tradeoffs of each. 12 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 823-002 Exhibit 1 The Industry 4.0 Data Journey Phase Steps rP os t Belden and Digital Transformation: From Product Sales to Solutions Sales Actions Pre-ingestion: digitize assets and transfer data through the network securely 1. Digitize Establish secure network connectivity 2. Monitor Monitor assets remotely through digital interface Point of data ingestion 3. Diagnose Merge assets to perform root cause analysis 4. Control Utilize digital interface to remotely control processes/assets 5. Autonomous AI-driven orchestration of assets or processes Post-ingestion: data processing, visualization and analytics Casewriter, adapted from company documents. Exhibit 2 op yo Source: Belden Brand Portfolio, 2019 Brand Products Belden Alpha Wire GarrettCom Hirschmann Cables, Panels Cables Switches, Network Accessories, Routers, and Converters Switches, Wireless Devices, Network Accessories, Connectors, Fiber Interfaces, Cybersecurity Products Connectors, Cordsets, IO Sy Cables Wireless Routers and Gateways Fiber and Coaxial Products Gateways Switches, Transmitters, Extension Systems, Touch Panels Network Security and Compliance Automation Software Broadcasting and Production Equipment Fiber Optic Cables Industrial Cables Industrial Connectivity Devices Company documents. No Source: tC Lumberg Automation Mohawk NetModule PPC ProSoft Thinklogical Tripwire Grass Valley Opterna ITC Poliron Exhibit 3 Belden Values Customers define our success. 2. We play to win. 3. Continuous improvement is our way of life. 4. We reach for greatness. 5. We succeed together through teamwork. 6. We invest in talent. Do 1. Source: Company documents. 13 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 No Source: Casewriter, adapted from company documents. 75% Experience ensuring access and dialogue early in the buying journey Outcome-driven establishment of solution’s impact on business outcomes and customer KPIs Demonstrate solid knowledge of the vertical market Skills/Expertise Overlap with Belden’s Current Capabilities Vertically focused Engage early with customers on creating the digitization vision and identifying their current state Access stakeholders to engage on business outcomes 0% Experience conducting Gemba walks, workflow audits Lean practitioner Industry expertise (specifically operations) Familiarity with networking products 50% t -14- Technical network knowledge Experience conducting industrial network audits Familiarity with Industry 4.0 requirements. Lead network audits Customize solutions based on customer needs Solution Consultant 823-002 rP os Lead workflow audit Support in discussion leveraging Value Calculator Build propositions that create financial justification to increase the pace of digital change Digital Automation Consultant op yo Role Solution Account Manager ESD Staff Roles and Responsibilities tC Belden Sales Transformation Roadmap, 2022 Company documents. Exhibit 5 Source: Exhibit 4 Do 823-002 Exhibit 6 Belden ESD Sales Funnel rP os t Belden and Digital Transformation: From Product Sales to Solutions Sales 1. Qualify leads through basic research. 2. Discover customer needs and develop relationships. 3. Frame and communicate the potential value at stake. a. Identify competitive risks and competitors. b. Collect data on investment scale, solution value, overall equipment efficiency (OEE), and financial metrics. 4. Corroborate data with EBI. op yo c. Define technical solutions, using audit if necessary. a. Analyze data collected during Stage 3. b. Identify bottlenecks and network issues. c. 5. Map the investment process. Reinforce value through syndication of solution with coaches. a. Confirm the value of the solution with EBIs. b. Incorporate EBI feedback. 6. Validate options for creating the solution. tC c. Finalize solution and align on pricing, propose to customer. a. EBI confirms that the solution meets all key criteria. b. A clear implementation journey is identified. The business proposal is evaluated to ensure it matches all commercial, budget, and technical criteria. No c. d. A Belden coach advises and influences negotiation tactics 7. Close deal with each party agreeing to terms. 8. Implement solution and provide support. Casewriter, adapted from company documents. Note: EBI = economic buyer influencers. Do Source: 15 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Warehouse Corporate External Warehouse Manager VP of Supply Chain Warehousing Consultant Inputs Source: Company documents. Capture rate (adjustable on Outputs tab) Vendor price and contract terms; Plants’ network performance Maintaining required output rate while sustaining low costs and high quality 823-002 1. Determine projected OEE lift based on the Subsegment and adjusted OEE values and scaled this lift up or down based on the site’s actual OEE losses 2. Adjust the expected OEE lift based on digital maturity inputs 3. Calculate value outputs based on this adjusted OEE lift 4. Calculate cost based on each solution step for plants differentiated on digital maturity Assumptions A. OEE lift assumed from solution package selected and expert interview estimates of benefits B. Each of the expected benefits for OEE can be adjusted in proportion to the opportunity C. Cost estimates from hardware and software BOM can scale based on digital maturity One-time Recurring Value (Recurring $, OEE, Margin, Conversion Cost) Recurring $ Benefit OEE Lift Conversion Cost Savings Gross Margin Improvement Investment Required rP os Outputs Implementation timeline along integration into digital use cases Design combination of automation digital use cases to meet clients’ operational needs; Manage implementation process and timeline Methodology Minimizing cost and disruption to operations; Productivity savings Operating profitability and maintaining strong customer relationships; Maintaining employee safety and morale Meeting production goals across volume, cost, quality; Abiding by corporate and government policies and regulations Identify needs and develop digital use case requirements; Build the business case for the automation digital use cases Responsible for overall warehouse finances, operations, compliance with regulations, and customer relationships Responsible for all production, operations, supply chain and development activities across warehouse locations Value Calculator Overview Solution package selection Digital maturity survey/questionnaire Adjust assumptions if necessary OEE Lift (by maturity level) P&L Breakdown COGS Exhibit 8a Company documents. Corporate COO Source: Approves vendor relationships and management for solutions Corporate Priorities Reliability; Scalability; Service/support ROI; Productivity savings op yo Develop directives to maximize ROI across company-wide projects Corporate Implementation of digital use cases and integration into IT systems tC Identify automation opportunities, get buy-in from internal stakeholders Role CFO Chief Purchasing Officer Warehouse Corporate Automation Lead Automation Engineer No Location Key Stakeholders during the Discovery Phase, Materials Handling Vertical Title Exhibit 7 Do t -16- 823-002 Exhibit 8b rP os t Belden and Digital Transformation: From Product Sales to Solutions Sales Value Calculator Sample Value Assumptions, Beverage Industry OEE Baseline OEE Breakdown Change Over Micro Stops Scrap Speed Loss 68% 9% 9% 2% 5% 7% OEE Improvement – Low Estimate Product Schedule Optimization Predictive Maintenance Connected Workers and Machines Total Improvement 0% 5% 0% 5% Change Over Micro Stops Scrap op yo Breakdown Speed Loss Total 4% 0% 1% 0% 5% 0% 0% 0% 2% 7% 0% 0% 1% 1% 2% 4% 0% 2% 2% 13% OEE Improvement – High Estimate Change Over Micro Stops Scrap Speed Loss Total 0% 5% 1% 2% 0% 8% 8% 0% 0% 0% 2% 10% 0% 0% 1% 2% 2% 5% 5% 1% 4% 2% 20% tC Breakdown No Product Schedule Optimization Predictive Maintenance Connected Workers and Machines Total Improvement 8% Max Potential OEE Breakdown Change Over Micro Stops Scrap Speed Loss 4% 1% 5% 4% 1% 0% 4% 2% 5% 5% Do Low Estimate: 81% High Estimate: 88% Source: Company documents. 17 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Belden and Digital Transformation: From Product Sales to Solutions Sales ESD Training Overview for CPG Introduction to ESD Week Module 1. Intro to ESD, CPG primer Belden offerings ESD sales process Opportunity qualification Discover customer needs Frame value proposition Deep dive on value calculator Pipeline management Bringing it all together 1. 2. 2. Developing and managing ESD opportunities 3. 4. 4. 5. 6. Conclusion Source: Company documents Exhibit 10 Why enhanced solution selling? Why CPG? What does a Belden solution look like? Introduction to new sales process Qualifying opportunities through secondary research Identifying key stakeholders and their needs Calculate and communicate value to customers Practice using the value calculator Track progress and manage opportunities ESD Qualitative Performance Review Topics Topic Sub-Questions What is the current overall pipeline size? What is the value of current funnel wins? What is the current progress to target (actuals and forecast)? What are our recent funnel wins to celebrate? What can we learn from opportunities we lost/canceled? What opportunities are stuck in the pipeline and how can we move them forward? How are opportunities progressing between stages? Are we introducing enough new opportunities into the pipeline? How good are the new opportunities we are creating? How are sales representatives performing as a team? tC 1. Wins vs. Targets 2. Opportunity Performance 3. Stalled Opportunities Pipeline Flow Opportunity Generation Lead Quality Team Performance No 4. 5. 6. 7. Themes op yo Exhibit 9 rP os t 823-002 Company documents. Do Source: 18 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Consumer Packaged Goods (CPG) Type of Customer Exhibit 11 No Availability Equipment breakdown Changeover time Cleaning Time Performance Machine Speed loss Micro Stops Quality Scrap Wastage tC CPG manufacturers use overall equipment efficiency (OEE) as the key metric to measure and improve operational performance Challenges Sample of ESD Use Cases Do Machines Workflow Optimization Limit changeovers, cleaning time and waste due to SKU sequencing, inventory planning Production schedule optimization Reduce downtime due to equipment failure Predictive maintenance Reducing machine speed loss Reducing changeover between SKUs Reducing waste driven spoilage of inventory Optimizing workers’ time by time Reducing cleaning time of the line Reducing breakdowns equipment waste / Reducing generated scrap Reducing micro stops of the line Improved OEE by: Impact rP os op yo time Connected Operations – Synchronization Real – Connected Machines adjustments Connected Workers – Real time insights & advice Connected plant Use Cases / Solutions 823-002 t -19- This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860 Source: No Challenges tC Customers also demanded more information from their EPU. All this is required the use of advanced features and realtime data availability. EPUs faced increasing remote operations, increased need to integrate distributed energy resources coming from small-scale renewable generation sources, and operational efficiency gains. Company documents. Electric Power Utility (EPU) Type of Customer Do Remote operation equipment Advanced fault locator system Automated power re-dispatching Reduce frequency of power outages Reduce downtime due to external factors Predictive maintenance Connected Operations of Automatic outage detection and restoration Reduce frequency outages Improved experience Remote Activation/Deactivation customer service due to (weather, Improved demand prediction digital Reduce downtime external factors vegetation…) power Improved resource allocation of Reduced safety incidents Impact rP os op yo Condition based monitoring primary Smart metering Connected Assets Connected smart wearables Smart scheduling and real time location Connected Workers Connected EPU Use Cases / Solutions 823-002 t -20- 823-002 Endnotes rP os t Belden and Digital Transformation: From Product Sales to Solutions Sales 1 “How Do OT and IT Differ?” Cisco, https://bit.ly/3Or8caB, accessed July 2022. 2 Rich Castagna, “Operational Technology vs. Information Technology Explained,” TechTarget, July 14, 2021, https://bit.ly/3gcKiCI, accessed July 2022. 3 “Wires and Cables Market Size Worth USD 294.73 Billion, Globally, by 2029 at 5.7% CAGR: Fortune Business Insights,” Global Newswire, April 11, 2022, https://bit.ly/3X2Tcnb, accessed July 2021. 4 Prysmian, 2021 Annual Report, p. 12, https://bit.ly/3EzwnQH; Currency Converter, Xe.com, https://www.xe.com/currencyconverter/convert/?Amount=1&From=EUR&To=USD, accessed July 2022. op yo 5 Amphenol, 2021 Annual Report, p. 1, https://bit.ly/3TQdHRe, accessed July 2022. 6 “Networking Equipment Market 2020: Global Industry Trends, Component, Data Rate, Regional Overview, Technology, Geography, Revenue, CAGR of 4.4%, and Forecast Outlook till 2026,” Global Newswire, July 30, 2020, https://bit.ly/3hORPYN, accessed July 2022. 7 “Networking Equipment Market 2020: Global Industry Trends...” Global Newswire. 8 Oliver Straehle, Adrien Bron, and Dave Crabbe, “The Hardware Paradox: Machinery Must Expand beyond Machines,” Bain & Company, May 2, 2022, https://bit.ly/3FFvYNb, accessed December 2022. 9 “From IT/OT Coexistence to Convergence: 5 Pain Points to Overcome,” Belden company blog, August 5, 2020, https://bit.ly/3AhrvNu, accessed July 2022. 10 Bernard Marr, “What Is Industry 4.0? Here’s a Super Easy Explanation for Anyone,” Forbes.com, September 2, 2018, https://bit.ly/3AluDbn, accessed July 2022. 11 “Industry 4.0 Market to Hit USD 337.10 Billion by 2028; Increasing Adoption Automated Systems to Augment Market Growth: Fortune Business Insights,” Global Newswire, October 25, 2021, https://bit.ly/3Obn78m, accessed July 2022. tC 12 IBM, “What Is Edge Computing?” https://www.ibm.com/cloud/what-is-edge-computing, accessed August 2022. 13 “Industry 4.0 Market to Hit USD 337.10 Billion by 2028...” Global Newswire. 14 “Top 10 Leading Companies Offering Industry 4.0 Solutions,” Emergen Research, April 7, 2022, https://bit.ly/3HnLqi8, accessed July 2022. 15 Ben Davies, “How IT/OT Convergence Is Critical to Industry 4.0 Success,” CBT, April 30, 2021, https://www.cbtechinc.com/how-it-ot-convergence-is-critical-to-industry-4-0-success/, accessed July 2022. No 16 Ashish Chand, “Why and How Should We Transform?” Belden internal report, February 2022, accessed July 2022. 17 Ewelina Gregolinska, Rehana Khanam, Frédéric Lefort, and Prashanth Parthasarathy, “Capturing the True Value of Industry 4.0,” McKinsey & Company, April 13, 2022, https://bit.ly/3Ojfxc8, accessed July 2022. 18 Gregolinska, Khanam, Lefort, and Parthasarathy, “Capturing the True Value of Industry 4.0;” Stefanini Group, “The Fourth Industrial Revolution: Industry 4.0 Challenges and Opportunities for Your Business,” January 5, 2021, https://bit.ly/3UIRd5O, both accessed July 2022. 19 Malia Spencer, “After $710M Sale, Tripwire to Boost R&D in Portland, CEO Sticking Around,” Portland Business Journal, December 9, 2014, https://bit.ly/3Ofxh8k; TVNewsCheck Staff, “Belden Buying Miranda for $332 Million,” TVNews Check, June 5, 2012, https://bit.ly/3Eh2wLo, both accessed July 2022. Do 20 Straehle, Bron, and Crabbe, “The Hardware Paradox: Machinery Must Expand beyond Machines.” 21 Charlie Sheridan, “Introducing New Google Cloud Manufacturing Solutions: Smart Factories, Smart Workers,” Google Cloud company blog, May 5, 2022, https://bit.ly/3AgtOAv, accessed August 2022. 21 This document is authorized for educator review use only by GARY HUNTER, University of Mississippi until Mar 2023. Copying or posting is an infringement of copyright. [email protected] or 617.783.7860